Adeno-associated virus type 2 (AAV) is a non-pathogenic human parvovirus which is being developed as a gene therapy vector. The AAV rep gene open reading frame encodes four overlapping Rep proteins. Rep68 and Rep78 bind to the AAV genome's inverted terminal repeats, have enzymatic activities which are necessary for AAV DNA replication, regulate AAV gene expression, inhibit HIV-1 replication, are required for preferential integration of the AAV genome into a region of human chromosome 19, and inhibit cell division. We have expressed wild-type and mutant Rep proteins from the HIV-1 long terminal repeat promoter in human 293 cell transient transfections or as maltose binding protein fusions in Escherichia coli. We have shown that Rep78 and Rep68 can mediate the formation of a complex between the ends of the AAV genome and the chromosome 19 integration site. This work may lead to the development of AAV gene therapy vectors with site-specific integration. We have also demonstrated that the repression of AAV RNA levels by Rep proteins is mediated, at least in part, by a Rep binding site within the p5 promoter region of AAV. Our analysis of mutant Rep proteins has shown that part of the down-regulation by wild-type Rep78 and Rep68 is independent of this binding site. Two mutant Rep proteins were found to be dominant- negative for the DNA helicase activity, which had previously been demonstrated for wild-type Rep78 and Rep68. This observation is consistent with the model that the Rep proteins function as multimers. Our mutant Rep proteins that lack DNA helicase activity cannot efficiently down-regulate a p5 promoter with a mutated Rep binding site or the AAV p19 promoter. Studies with a maltose binding protein-Rep68 fusion have demonstrated a DNA-stimulated ATPase activity and the ability to unwind RNA/DNA hybrids. This apparently non-specific RNA/DNA helicase activity may be involved in the aspect of regulation of the p5 promoter which does not depend on binding to the Rep binding site within the promoter, as well as p19 regulation.